Banking on Innovation

This episode of the Banking on Innovation podcast features Chris Creed, the Chief Investment Officer of the Department of Energy's Loan Program Office (LPO). The LPO, which was established in 2005, plays a crucial role in accelerating emerging climate sustainability technologies that are likely to be important for the country's future.

Chris explained that the little-known LPO offers senior debt to address financing challenges of sustainable energy projects through several loan programs. It aims to enable and accelerate commercialization of energy technologies and projects that are still too risky to qualify for commercial loans but once successful, are likely to measurably contribute to climate sustainability.

Chris discussed the program's early successes, citing a default rate for initial investments that was less than half of what they projected. Early LPO investments included financing for Tesla and utility-scale solar, which has now matured to being what he describes as a “bankable product.” He then highlighted some technologies that LPO is currently focusing on “bridging to bankability”, including offshore wind power, onshoring battery technology and supply chains for electric vehicles, and power grid connectivity for homes and buildings.

The discussion touched on recent changes in credit spreads, which have made LPO programs more attractive – and necessary. Regarding actions that banks can take immediately and in the coming years to promote climate sustainability, Chris recommended continued investment in viable clean energy asset classes like utility-scale solar. He also suggested collaboration with LPO to de-risk projects through partnerships and co-investment opportunities that can catalyze deployment in emerging industries.

In the final segment, the conversation shifted to the role banks, together with LPO, can play in creating win-win situations for consumers, sustainability technology businesses, and the banks themselves. Chris talked about helping change consumer and small businesses' behaviors to align with their own principles and environmental imperatives. For instance, banks can offer customers insights into energy spend and information about alternatives that would be less costly and more sustainable. With LPO support, banks, could also offer preferential loans for heat pumps versus HVAC systems or even integrate lower long-term energy spend due to sustainable CAPEX investment into residential mortgage calculations.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower

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In this episode of the Banking on Innovation podcast, we welcome in Ken Meyer, Truist Bank’s Chief Information and Experience Officer for Consumer Products.  

Those twin titles have meaning for Ken, who sees his job as bringing tech “forward” in the bank at Truist, to where it can markedly improve the customer experience.  

“That mix (of tech and customer experience) has always been something that’s fascinated me,” Ken told us on the podcast. “It’s something that drove my focus: Making sure we can really translate what our technical capabilities are and pull them forward to actually impact our clients.”  

As a key contributor to one of the biggest bank tech stories in recent years – the merger of BB&T and SunTrust to create Truist - Ken had plenty of interesting topics to cover including:   

• Truist’s approach to tech implementation during the merger, and why often their choice wasn’t between the legacy tech of SunTrust or BB&T, but new, innovative solutions.  
• What some of Truist’s most important learnings from the merger experience were.  
• Truist’s use of innovation and personalization, as well as their T3 Initiative (Tech + Touch = Trust) to deliver on Truist’s new purpose and brand promise. 
• The balance Truist tried to strike between efficiency and innovation during the merger. 
• How Truist plans to use innovation of product and experience to win in the ongoing battle for deposits. 
• How Truist is getting customers to take action on the insights the bank provides.  

… and more 

Beyond the episode: 

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/ 

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower 

This week on Banking on Innovation, we will view banking and customer innovation through a completely different lens. Our guest is the recently appointed CEO of Consumer Bankers Association (CBA), Lindsey Johnson.

CBA is the only banking association in the US focused exclusively on consumer retail issues. Its members include America’s largest bank holding companies as well as regional and community banks, giving it a unique perspective on, and influential role in, the issues confronting the industry.  In the face of rapidly evolving technology and customer expectations, it’s critical that the industry and lawmakers collaborate to promote innovation that delivers value.

Lindsey would like to see policy makers and banks work more closely together to ensure that every American has access to the financial tools that they need and demand.

“We have to turn a corner to a new chapter where policy-makers don’t see banks as adversaries. The banking system is focused on how to anticipate the next generation of individuals’ financial needs. We need to partner with policy-makers to make sure we can offer these different products to consumers. But when we hear from policy-makers making misleading statements about the banking system, that becomes a challenge for consumers to really discern the truth from myth.”

PLUS you’ll discover:

>> The measures Lindsey believes government must take to help consumers in a challenging economy

>> The biggest challenge for banks when leveraging data to improve customer experience

>> The regulatory challenges she anticipates around Open Banking

>> What she thinks the government must do to combat a “huge rise in scams”

>> The best way for banks and policy-makers to work together

...and more.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower

This week’s guest on Banking on Innovation is Todd Lane, President and CEO of California Coast Credit Union, a $3.6 billion credit union based in San Diego.

Todd was appointed Chief Financial Officer of Cal Coast in 2009 and has served as president and CEO since 2015.

Although Cal Coast is a relatively local credit union, serving nearly 200,000 members who live or work in San Diego or Riverside counties, Todd argues that it must be ambitious in its vision:

“The credit union market in California is very unique, and that plays into the approach that we are taking in terms of technology, personalization and membership. We have to compete with the big guys. And the only way to do that is to own the member experience.”

He also spoke at length about the credit union’s founding vision of working closely with educators to improve their financial wellness, and how technology and digitization is helping Cal Coast remain true to its customer-centric roots:

“Certain programs we’re trying [to implement] manually are not scalable, so we’re trying to accomplish them in automated fashion. The need is far greater than we can deliver without technology.”

PLUS you’ll discover:

>> How Cal Coast is successfully bringing younger members on board

>> How Todd gained his board’s ongoing support for his vision of owning the member experience

>> 3 surprising drivers behind Cal Coast’s growth in recent years

>> The inspiring story of how Cal Coast staff helped struggling members get through the 2008 recession

>> Why the most important demographic for Todd is “Gen-C” - and the surprising members of this group!

...and more.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower

This week’s guest on Banking on Innovation is Harit Talwar, who in 2015 joined Goldman Sachs to establish Marcus and build a differentiated consumer business.

Marcus went on to become of the most impactful challenger banks in history, offering financial products known for their simplicity and transparency. To date it has around 16 million retail customers, more than $120 billion in consumer deposits and revenues in the $1.5-$2 billion range.

Although few people believed that true innovation could come from within a 150-year-old institution, one of Marcus’s advantages was precisely its heritage.

“Regulatory compliance, risk management and capital management is in our DNA. And while these things may not sound very sexy, they’re absolutely critical to be a successful disruptor in a regulated industry,” says Harit.

Another advantage was its “customer-obsessive” approach, says Harit, who previously served as President of US Cards for Discover Financial Services and managing director of Morgan Stanley’s Consumer Banking Group International.

By the time he left Marcus in 2021, they had interviewed 100,000 consumers directly and indirectly, to keep in touch with their wants and needs. The bank identified that customers “think banks are in it for themselves.”

The white space, therefore, “was to demonstrate that you are a brand and financial services organization which is on the side of the customer... And to demonstrate this in every transaction, you must be simple and you must be transparent.”

This became the foundation of Marcus’s disruptive approach, which includes eliminating confusing jargon, inflexible products and hidden fees.

PLUS you’ll discover:

>> Why Harit looked for business models outside the banking industry

>> How he hired a team of exceptional “unicorns” - and where he found them

>> Why he wasn’t looking to deliver an innovative product (and where he tried to innovate instead)

>> Banks’ ethical obligations in the way they leverage customer data

>> The next frontier in applying AI to enhance the customer experience

>> Why Harit believes the banking industry is ripe for further disruption - and the institutions he perceives as vulnerable

...and more.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower

This week’s guest on Banking on Innovation is Hans Morris, Managing Partner of NYCA Partners, a premier venture capital and advisory firm focused on the fintech sector.

Hans brings a unique perspective because of his rare blend of investment savvy, extensive operating experience, and deep fintech knowledge. His former roles include President of Visa and CFO, Markets and Banking at Citigroup. 

Meanwhile, NYCA has an enviable roster of Limited Partners, highly accomplished former industry executives who operate as advisors to portfolio companies. Hans serves as a member of the board.

He argues that if banks want to lead in innovation and quickly improve customer experience, they must learn how to develop strong relationships with fintechs.

The best fintech companies will prefer to work with banks that have created a working environment that is conducive to cooperation.

To earn “the reputation of being good to work with,” banks must demonstrate that they make good decisions quickly, will implement technology that works, are fair and straightforward to deal with, and won’t give their partners the run-around.

To make this happen, the bank’s CEO and senior management must take ownership of innovation in their organization rather than delegating it to a technology team.

“I don’t see this as a technology problem - it’s a leadership issue,” says Hans.

PLUS you’ll discover:

>> Why every bank needs a “3 meetings to POC” rule

>> 4 ways for banks to attract top fintech companies

>> How fintechs are extending the customer franchise - and how they can help banks do the same

>> The biggest technological challenge facing banks and credit unions

>> 4 criteria for banks to measure the success of their interactions with customers

...and more.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower

Our guest on the sixth episode of Banking on Innovation is Erin Pryor, Executive Vice President, Chief Marketing Officer at First Horizon Bank. Already the fourth largest regional bank in the American Southeast, First Horizon is set to become the sixth-largest US bank by assets by mid-2023, when its $13.4 billion acquisition by TD Bank is expected to complete.

Erin previously served as Executive Director of Brand Management at USAA, a leading provider of financial services to the US military, and fulfilled leadership positions in United Capital Financial Advisers and Opus Bank.

Now she is leading is First Horizon through a marketing transformation, including updating the bank’s MarTech stack. The first CMO on our podcast, she argued that there is a growing convergence of traditional marketing campaigns and the delivery of personalized insights for bank customers:

“At First Horizon, our purpose is to provide capital and counsel. The capital is not just the money - it’s also the human capital and the advice and counsel on what your goal is, whether that’s growing your business or buying a home. But if you’re providing that advice and you know your client, then it makes sense to provide them with an applicable offer. And so the marketing message and the marketing offer needs to be aligned with the client journey, which is part of the personalization. So I think we’re there.”

Erin also spoke at length about how the bank uses its CRM, which she calls the “heartbeat at the center” of its efforts to deliver improved customer experiences and turn data into actionable advice.

“That really is where the client experiences lives.”

PLUS you’ll discover:

>> How Erin’s approach to leadership has changed over 20 years

>> The methods she uses to develop a full picture of customer needs

>> Why First Horizon took a risk by becoming the first in the US to use Salesforce’s Customer Data Platform

>> Why the bar for great customer service in banks is set outside the financial services industry

>> Erin’s biggest obstacle to delivering highly personalized customer experiences

>> Why over-communicating with clients is a huge misstep

>> Expanding the definition of where the client journey takes place

>> How being a competitive athlete prepared Erin for a career in banking

...and more.

Our guest on Banking on Innovation this week is Ankit Bhatt, Executive Vice President, Consumer and Chief Digital Officer at US Bank.

Ankit built the US Bank mobile app from scratch in 2019, the same year he was named Digital Banker of the Year by American Banker. The app, which has delivered more than 2 billion personalized insights, has more than a million 5-star reviews in app stores. And in the third quarter of 2021, the industry benchmarking firm Keynova Group named it as the top mobile app.

The key to creating a best-in-class app? According to Ankit, the bank has followed a “Digital Plus Human” strategy, seeing the app as one strand in its mission to deliver unified advice to customers across digital and banker channels.

“We have a very defined approach - a philosophy if you may - which is that, in order for us to become central to our customers' lives, we need a great digital experience. But we fully recognize that if we don't combine that great digital experience with a great human experience - connecting customers to the colleagues that serve [them] at the bank - we will fall short.”

Ankit revealed how the “Digital Plus Human” approach has not only helped customers but created a sense of purpose amongst team members. It unites them around a common vision and keeps them focused on customer needs:

“It’s not just about creating that digital feature... That technology person who’s helping bring that to life, they’re not just thinking about, ‘How do I code this to bring this alive’. They’re thinking about the purpose behind it: How are we helping the customer? How is this going to improve their life?”

PLUS, on this episode you’ll learn:

>> Ankit’s 4 principles for excellence in mobile strategy

>> Why giving customers personalized insights is no longer enough for banks to differentiate

>> The key to implementing your digital vision in an agile, nimble way

>> Two features which Ankit believes add the most value to his mobile customers

>> Why US Bank’s in-branch staff have bought into the digital agenda

>> The biggest roadblock to driving continuous innovation - and how US Bank overcomes it

>> Three ways US Bank spots changes to customer needs early

>> The emerging trend Ankit believes will shape mobile banking in the near future

...and more.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower

KeyBank has around 1,000 branches in 15 states. Jamie is a savvy industry veteran who is skilfully navigating the complex terrain of how regional banks can capitalize on both opportunities and threats from the burgeoning fintech ecosystem.   

KeyBank is taking bold and non-traditional steps to deliver on their digital ambitions – acquiring AQN, an analytics company, and Laurel Road, a student loan refinance operation which they are refashioning into a digital-led, full-service bank for the healthcare market.     

Jamie brings a real appreciation for the financial services ecosystem and complex competitive landscape. He combined new ideas about the capabilities necessary to serve customers with pragmatism about the speed and types of innovation possible. 

“As much as we talk about the digital revolution, I think in many cases it’s a digital evolution,” he says. “We’ll be measuring the change over the course of many years or decades.” 

Different parts of the market are also maturing at different paces. Therefore, how and where you innovate must be considered carefully.  

“We’ve coined a term - ‘Targeted scale’ - which means we’re not going to out-scale the trillionaire banks at KeyBank. But what we can do is pick our spots, like renewable energy, low-income housing and healthcare, where we can really focus our time, effort and resources and create targeted scale... If you’re trying to be strong everywhere you’re probably strong nowhere.” 

The 3 Rules for Successful Innovation 

Drawing on his experience in different organizations - including the United States military, where he was a captain - Jamie observes three key rules for successful innovation.  

1. First, “you have to think about innovation in horizons. Thinking about what you can innovate this year might be different than innovation you’re thinking about five years from now.” The former may be “slight tweaks... relentless incrementalism” rather than true original thinking, while the latter may require thinking and design that never gets implemented. 
2. Second, organizations must avoid “innovating for the sake of innovating.” Instead, start with a clearly articulated strategy outlining your target market and how you are trying to serve it, then use that as a frame for innovation. 
3. Third, do not confine your innovation to technology, but consider processes and people too. 

For example, says Jamie, he’s particularly proud that at KeyBank “We’ve been doing a lot of innovation on how to allow small start-up, nimble companies, typically that we’ve acquired, to keep their culture, spirit and speed, but within a larger regulated organization.” 

The implication is that organizations cannot wait until they have achieved parity to start considering where they can innovate. It must be part of your agenda from the start. But equally, organizations must be intentional about their focus and accept that they cannot be innovative in every part of their business. 

...and more.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower

Brendan has an 18-year history at the bank, which has over 1,200 branches and $192 billion in assets. And he has driven outsized market share growth in every position he has held, whether in consumer deposits and lending, consumer banking product management or consumer finance.

During the podcast, Brendan explained how he has innovated at every stage of his career, both when he was starting new services within Citizens and when he managed mature ones. So while there is increased pressure on banks to differentiate because of greater customer choice, disruption does not have to come from obvious quarters like challenger banks. It can take place in regional banks too:

“That’s what we’re trying to do at Citizens - be a fintech within the structure of a mature, well-run, well-capitalized bank. It’s easier said than done, but this is that moment in the market where the banks are going to separate from each other and say, which ones can lean into that hybrid mindset and which ones retrench back to the traditional mindset. And I think that will be what separates the winners from the losers.”

Brendan urged banks to think in new ways about digital acceleration, arguing that “It’s not just about technology and displacement of bricks-and-mortar. It’s about financial confidence and empowerment for customers.” Banks need to deliver the personalized insights across all channels, and consider now how to upskill and invest in their branch staff to enable them to deliver that value, as part of the digital acceleration process.

Plus you’ll learn:

• How Brendan re-invented himself at every stage of his career - and how this prepared him for his biggest role to date.
• Why high net worth individuals need basic financial insights - it’s not just for mass market customers.
• Why Brendan believes banks have an advantage over fintechs - and are well positioned to “win”.
• The real key to improving customers’ financial confidence - it’s not just about helping them with ‘big ticket’ items.
• How banks can avoid being overwhelmed by the intensity and speed of change in the market.

...and more.

Beyond the episode:

Find out more about Personetics’ personalized, customer-engagement platform for financial services: https://personetics.com/

Connect with podcast host Jody Bhagat on LinkedIn: https://www.linkedin.com/in/digitalbusinessgrower